Could Americans be in danger of growing too old, so old in fact that they outrun their retirement savings?

That is the conclusion of a new Government Accountability Office study, which suggests that Americans are increasingly worried about the prospect it could happen to them.

"Today, couples both aged 62 have a 47% chance that at least one of them will live to their 90th birthday," said the study, prepared for the Senate Special Committee on Aging.

"In addition to the risk of outliving ones' assets, the sharp declines in financial markets and home equity during the last few years and the continued increase in health care costs have intensified workers concerns about having enough savings and how to best manage those savings in retirement."


The new study raises some red flags about changes taking place in how workers get their retirement money, and suggests that increasingly Americans -- and Congress too -- has to look not only at how much to set aside for retirement, but how that money is managed and protected.

As government-protected pension plans and their annuity payments are increasingly replaced with defined-contribution plans, it suggests retiring workers are increasingly having to make tough decisions on investing lump sum payments that they have little preparation for. They then have to make decisions without the government protection the older plans enjoyed and with little leeway for errors.

"Given the long-term trends of rising life expectancy and the shift from [defined benefit] to [defined contributions] plans, aging workers must increasingly focus not just on accumulating assets but also on how to manage those assets to have an adequate income throughout their retirement," said the report. "Workers are increasingly depending on retirement savings vehicles that they must self-manage, where they not only save consistently and invest prudently over their working years, but now continue to make comparable decisions through their retirement years."

The report said the decisions are difficult for "the majority" of workers and even more so for workers with balances of $100,000 or less. "Many will continue to face little margin for error," said the report.

The report comes as the Department of Labor examines the possibility of pushing employers to provide more options toward converting lump sum payment to long term annuities,

"It's definitely a concern for everyone," said Ted Godbout, director of communications for The ERISA Industry Committee, the trade association representing the American wage-earning ndustry.

Sen. Herb Kohl, (D-Wis.), whose committee requested the study, said in a statement that the report verified his concerns.

"As more Americans rely on defined contribution plans, the choices they have to make in order to achieve a secure retirement have grown more complex," he said. He said he would like to make the process, "a little more user-friendly."

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